Real Property Company Gains Tax Calculation Q7
Q.
Velerom Sdn Bhd was a controlled Real Estate company formed on 1 March 2015 with the paid up capital of 200,000 ordinary shares of RM1 per share unit. Hany Enterprise owned 40,000 share units in the company. On 1 January 2017, Velerom Sdn Bhd acquired an interest in real property worth RM700,000. On that date, the total tangible a of the company was worth RM1,500,000.
On 1 June 2017, Hany Enterprise acquired an additional 20,000 share units from another shareholder at RM80,000.
Given that the property was situated close to a newly developed business centre, Velerom Sdn Bhd had the property revalued. At the same time, the company had increased its paid up capital to 300,000 share units. From the excess reserve realised through the revaluation, 100,000 units were issued in the form of bonus shares to existing shareholders. Of this Hany Enterprise received 20,000 share units on 1 Jan 2018.
On 1 March 2018, Hany Enterprise sold 40,000 share units at RM250,000 and followed with another sale of RM10,000 share units on 30 June 2018. Hany Enterprise will dispose a further 10,000 share units in year 2019 if there is an offer to purchase the shares at RM6.00 per unit.
a) Calculate the real property gains tax payable in this case. (15 marks)
b) Clarify conditional contract. (5 marks)
c) How are acquisitions and disposals of assets done under conditional contract. (5 marks)
(25 marks, 2019 Q7)
A.
Ref:
Velerom Sdn Bhd was a controlled Real Estate company formed on 1 March 2015 with the paid up capital of 200,000 ordinary shares of RM1 per share unit. Hany Enterprise owned 40,000 share units in the company. On 1 January 2017, Velerom Sdn Bhd acquired an interest in real property worth RM700,000. On that date, the total tangible a of the company was worth RM1,500,000.
On 1 June 2017, Hany Enterprise acquired an additional 20,000 share units from another shareholder at RM80,000.
Given that the property was situated close to a newly developed business centre, Velerom Sdn Bhd had the property revalued. At the same time, the company had increased its paid up capital to 300,000 share units. From the excess reserve realised through the revaluation, 100,000 units were issued in the form of bonus shares to existing shareholders. Of this Hany Enterprise received 20,000 share units on 1 Jan 2018.
On 1 March 2018, Hany Enterprise sold 40,000 share units at RM250,000 and followed with another sale of RM10,000 share units on 30 June 2018. Hany Enterprise will dispose a further 10,000 share units in year 2019 if there is an offer to purchase the shares at RM6.00 per unit.
a) Calculate the real property gains tax payable in this case. (15 marks)
b) Clarify conditional contract. (5 marks)
c) How are acquisitions and disposals of assets done under conditional contract. (5 marks)
(25 marks, 2019 Q7)
A.
Ref:
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